After steering the Indian operations of phone maker Nokia for a long time, D Shivakumar is heading for a global role and would shoulder a bigger responsibility — of exploring growth
opportunities in Africa and Middle East for the Finnish giant. The company, which still has a dominant market share in India, is facing tough competition from smaller players. As it leaves no stone unturned to grab a larger share of the booming Indian telecom market, Nokia has launched two new dual-SIM phones in the mid-segment — Asha 200 (`4,759) and X2-02 (`4,100). Shivakumar, the India managing director and vice-president of Nokia, spoke to DNA about the company’s expansion plans, consumer preferences and the market in general. Excerpts from the interview:
You are moving to a global role early next year. Can you elaborate a bit on your new position?
As a company we are planning to explore opportunities in Middle East and Africa. I am going to take care of this division. We feel Africa is one of the next big growth markets for telecom. It has very similar characteristicstoIndia. Similar population, GDP of, say, around $1.3 trillion and per-capita income. In fact, the similarities do not end here. Even the mobile market is similar with more than 90% users having prepaid connection. There is an open distribution model. These geographies are feature-rich market. Hence, Africa is a big opportunity for most telecom companies. In fact, not only telecom, there is a huge opportunity for every sector including information technology.
You have spent considerable years as Nokia India managing director. How has the experience been? If I have to ask for a high point in your stint, what would that be?
It has been a tremendous journey for me, and I am being very honest here. We have made tremendous penetration in the Indian market in the last six years. We have witnessed the change in the mobile market from being just a phone to a technology that has become very dear to any consumer in the country. What is possible with this technology is in our minds...anything is possible. For me, the experience of building Nokia as a brand, as a component, with the help of my colleagues is something we are all proud of. I think the greatest achievement would be Nokia’s brand status in India. Also, working with the ecosystem and being part of the change is also something I cherish.
Would you agree that mobile handsets have become a commodity now? Just like the television industry where every company claims it has better features. But as far as consumers are concerned it is difficult to differentiate a X from a Y.
A mobile phone can never become a commodity because every phone has a unique combination of hardware, software and design. It can be customised according to one’s preference. Ultimately what you put in it, what applications, content and games you have in it is unique to you. Every company may claim that it offers these many applications etc, but ultimately what you decide to put in your phone makes it unique.
Nokia’s market share has been falling steadily. In fact, in May the company’s share dropped by a huge percentage. What is your take on the same?
We were late in launching our dual-SIM phones, because of which we did lose a bit of share in the market. It was one of our mistakes and a big miss. However, now that we have launched our phones in this category the market equations have changed. To sustain in this industry you need a strong brand, you need scale and you need to innovate constantly. As far as we are concerned, we have a combination of all three. There is no concept of catch-up game here. I agree we were late, but we have gained a significant traction. The feedback from customers has been extremely positive.
You mentioned innovation. Can you elaborate on the innovations that the company has done of late?
When other companies were introducing touchphones, we realised that consumers in India were wary of that as they did not have a back-up. If the touchphone stops working for some reason, there is no option of keypads. So we introduced the ‘touch n type’ phones in the market, which became a rage. This appealed to many Indians who could not relate to the touchphone as many find the keypad more familiar and comfortable. So, people who want to keep up with the latest technology can also use this phone as much as the one’s who are happy typing with the keypad.
Players like Micromax and Lava have gained significant market share in the lower segment. How are Nokia’s low-end phones performing vis-a-vis these companies?
All I can say we are doing well. How are they doing is something I can’t comment upon. The whole mobile industry is very competitive and this segment is no different. As I had said earlier, one has to innovate to sustain. We are trying to do exactly this, irrespective of the segment. We will have representation in all price range and products.
Do you think you were late to launch Windows phone is the country? How will you new offering be different from others?
I would not agree to that. We announced to the world in February 2011 that we will launch a Windows phone and we did it in nine months. We came out with not one but two products. Our discussion with Microsoft started in February. I agree our competitors had introduced Windows phone before us, but they might have initiated the discussions one year back. We did everything in nine months.
Nokia Lumia has been one of the biggest launches for the company this year. How well has the phone been received globally?
In Europe the response has been very positive. We will launch the Lumia range by mid-December in the country. We did a consumer preference study for the phone in India. Around 60% rate the Windows operating system on the phone either a nine or a 10 on a scale of 10 in comparison with other phones in this category. Nokia with Windows is the new religion. It will definitely be the biggest launch in the smartphone category in India.
Do you think the line between feature phones and smart phones is blurring?
When mobile phones were first launched, every developer wanted the phones to be light in weight. During those days weight of handsets was a big issue. Thereafter, the challenge was to add more and more features in a phone. By 2006, smartphones were the rage. They had qwerty keypads, internet etc. But now phones in every category have the same features. So, I agree that the dividing line between a smart phone and a feature phone is blurring. Feature phones have smartphones as a benchmark, but for the latter there is no benchmark.
Can you elaborate a bit on the scope of the mobile industry in India in the next few years?
The scope is huge, beyond imagination. In India, real income is rising. So, along with first-time users of phones there are also people who are looking at replacing their existing phones. In rural India, there are 200 million women and 200 million youth who are yet to be tapped. UID will be a great help in this. It will help bring in all those people who have not been part of the formal economy till date. Internet will now happen more on mobile phones than laptop. Internet on phone is no longer a top-end phenomenon.
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